— TOP TAKEAWAYS —

The Threat to Independent

Contracting: AB 5

WE ARE A NATION OF
INDEPENDENT CONTRACTORS
American workers want flexible work arrangements.
Technology has expanded independent contracting
work through the gig economy.
• I n 2019, an estimated 57 million Americans did
contract work.
• 1 in 5 jobs in America is held by an independent
contractor.
•N  early 75 percent of contractors are working
independently by choice.

AB 5 HARMS WORKERS
California’s AB 5 makes it more difficult to classify
workers as independent contractors. This:
•R
 aises costs for businesses. Reclassifying
workers and complying with wage and hour laws,
unemployment insurance, and other labor laws
would increase labor costs by an estimated 20-30
percent leaving less for job creation and wage
increase.
•T
 hreatens the economic security of workers.
Some businesses are opting to lay off their
freelance workforce. Independent contractors
report losing contracts, being laid off from
projects and unable to find freelance work.
•K
 ill flexible work arrangements. Millions of
Americans prefer to be their own bosses instead
of working as employees.

AMERICAN WORKERS NEED

FREEDOM & FLEXIBILITY
AB 5 isn’t just a threat to Californians. Its flawed
approach is spreading:
•S  everal other states have introduced or are
considering adopting tightened requirements
for independent contractors.
• The U.S. House of Representatives passed
the PRO Act (H.R. 2474), which adopted AB
5’s standard for classifying independent
contractors.

AB 5 is a fundamentally bad policy that should be

reversed and abandoned.

Instead, lawmakers should look to expand worker

freedom and give all Americans the chance to
design the life they desire.